This post took me a looooooong time to write, simply because it was so painful. As much as I hate to admit it (and probably you too), pensions have now turned out to be the biggest ponzi scheme in history. Although there are no exact numbers, experts estimate that there are trillions of dollars worth of unfunded pension liabilities in the U.S. alone. Let’s use a little bit of logic here, and we’ll realize that there is ABSOLUTELY no way the problem with those unfunded pension liabilities will be solved.
So stocks are scarring the average person, because of all the volatility we’ve seen (40% fluctuations a year, anyone?). Bonds are terrible too, as they pay next to nothing.
So the obvious question is, should you invest in real estate? The two choices you have are: American real estate, and an international investment property.
My thoughts on American real estate.
Obama, through previous mortgage incentive programs, has made sure that all those who wanted to buy a house buy it last year. So basically, he collected all the housing demand we would have for a few years, and put that demand all into the time frame of one year (when the mortgage incentive program was still available). So what happens now? Where’s all the housing demand supposed to come from? The sky?
Now with all this talk about a double dip recession, what would happen to American real estate if the economy did indeed slip back into a recession (not that we got out of one, in the first place)? Owning a house is completely discretionary spending. One can put off having kids, move in with family or a friend, etc.
Also, I’m a firm believer in cycles. Real estate cycles tend to last pretty long (13-20 years). This housing bubble that just burst back in 2006? Could take a while before the secular bear market for American real estate is over.
Foreign real estate.
Obviously, one would ideally want to buy bmv property (below-market-value-property). However, the value of real estate in the first place is hard to judge. Back in late 2008-early 2009, the real value of many homes in America was $0, because no one wanted to buy them. So how do you judge an the value of real estate in a foreign nation? Truth is, you really can’t. Real estate is a highly localized investment, and unless you live in the area, you wouldn’t really understand how much the land should be valued at. That is why, as a real estate investor, you have two choices.
An important decision when your investment is yielding handsome profits is whether or not you should close your investment (thus lock in your profits) or hold onto your position and hope for even more profits. Here’s how to decide.
Ok. So maybe repairing our decaying infrastructure isn’t the best thing to do. Or maybe it is. But it’s certainly better than spending billions on fighter planes and giving tax benefits to bankers (who end up destroying the economy). Over the past few years, we’ve seen the TARP and all these other American recovery programs. Funny thing is, I don’t see any difference. All these TARP programs did was temporarily bail us out (actually, they didn’t bail us out. They bailed out those who don’t deserve help a.k.a bankers). Cash for clunkers. Mortgage assistance. All these things did was to temporarily make the whole picture look nice and rosy. The instant the program ends, everything heads south.
I have a lot of thoughts on investing I want to share with you guys. As you may know, I prefer to write long posts, and none of these individual thoughts take a long time to describe. So I’ve decided to group these thoughts together into the second, monthly Random Thoughts on Investing – September 2011. You may or may not agree with my thoughts, but that’s ok. It’s always good to read about others’ opinions. In the comments section, I hope to read your opinions too about my thoughts.
In a modern, global economy where making purchasing decisions is as simple as getting cheap insurance quotes online, the financial state of affairs for the last several years has proven difficult for most. Yet, before the mess of the last financial crisis has even begun to pick up the pieces, the economy threatens to buckle once again. So is it time to panic that we’re on the verge of another financial meltdown?
According to the U.S. Bureau of Labor Statistics, projected employment will only increase 10.1% by 2018. This is not enough to keep up with the current rate of population growth, much less make a dent in the unemployment numbers that remain stubbornly stagnant at over 9%.
Investing in bull markets is simple. Just buy and hold. Anyone can do that. But investing in a bear market is tough. Here are 9 rules that will help you weather the crash, not necessarily unscathed, but in a much better condition than many other investors.
Hey there everyone! Not only am I having a stock picking contest this month, but I’m also giving away a $25 Amazon.com gift card!
So what do I love about October? Halloween of course! Also, the weather is beautiful this time of the year in China. Unfortunately, I’m not going back for a visit this year. Oh well. Maybe next year.
And the contest begins! Below are the contestants, and the stock they picked.
- Kay Lynn @ Bucksome Boomer: Apple, Inc – AAPL
- Jerry Kelly: Apache Corporation: APA
- John Gerusi: AT&T – T
- Sinclair89: Honeywell – HON
- Alex Kwon: Wal-Mart – WMT
- Funancials: Dollar General – DG
- Adam Mucin: Dollar Tree – DLTR
Hey everyone! This is the first stock picking contest I’m having on Investorz Blog.
Here’s how the contest works.
- Anyone can enter.
- Contestants have 7 days to enter this contest and choose which stock they think will perform the best. That means, you have from today (October 15, 2011) to October 21, 2011 at midnight EST to enter this contest.
- After the contest entrance deadline, no new contestants will be allowed. The stock that contestants pick must be on the S&P 500 or Dow Jones Industrial Average.
- You may not pick more than one stock. Anyone that attempts to enter this contest under more than one name will be deleted.
- If you would like to participate in this contest, please comment below in the comments section. Please include the name of the stock that you picked and its ticker symbol.
In the history of the financial markets, we have experience possibly hundreds of bubbles, from the tulip bubble all the way to the recent Web 2.0 bubble. The question is, how to you spot the top of the bubble, and get out before it’s too late? Truth is, it’s impossible to catch the top. Near the end of a bubble investors are in a maniac demeanor, hence it’s impossible to predict how long and how far the bubble can keep going. Just because the markets are in a bubble doesn’t mean they’re anywhere near the top of the bubble. However, here are some FUNDAMENTAL signs to watch out for.